Are Dave Ramsey’s 7 steps to building wealth outdated? George Kamel says no

Dave Ramsey is famous for it 7 baby stepsWhich focuses on building a solid financial foundation, eliminating debt, and developing wealth. However, this plan is not without controversy, as some people view Ramsey’s recommendations as outdated or disagree with how Ramsey prioritizes certain money moves.

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However, Ramzi’s character, George Kamel, credits the baby’s seven steps with helping him Become a millionaireand is believed to still be useful in 2025. Recently YouTube videoHe addressed some common criticisms and explained the benefits of following each step.

While $1,000 may seem like a lot of money for emergency savings, A Show the Federal Reserve report 37% of American adults didn’t have enough cash to cover an unexpected expense of $400 in 2024. So, the safety net is still better than many others.

Kamel also explained that saving this small initial amount allows you to move on to tackling your debt sooner. It’s early success that helps motivate you, and you’ll build a bigger cushion later.

find out: 4 secrets of really rich people, according to Dave Ramsey

Eliminating your consumer debt will free you from the associated interest charges, monthly payments and impact on your debt net worth. This step includes handling things like credit cards, car loans, and student loans, but excludes your home mortgage for now.

“The reason you might be late on your mortgage loan is because real estate is an asset that will reliably grow in value over time,” Kamel said. “Plus, it’s a mountain to pay off this giant loan.”

Ramsay’s approach also includes Debt snowball methodwhich may seem counterintuitive because it ignores interest rates and focuses only on the size of the debt. However, Kamel explained that the key is momentum that keeps you moving forward with your financial plan.

Being free of consumer debt should free up your budget so you can get back into it Fill your emergency fund With the suggested three to six months of your usual expenses.

Kamel explained that this step is successful because a larger financial cushion helps you avoid incurring future debts and stand in crisis mode when unexpected expenses arise. In addition, if you use a High-yield savings accountYou can start growing this money at a modest rate.

according to Fidelity’s Q2 2025 Retirement AnalysisUS employees contributed 9.5% of their salaries to 401(k) accounts. Ramsay’s plan involves contributing 15% of your pre-tax income to a tax-advantaged retirement account, and there’s a good reason behind that target rate.

“We’ve just discovered that if you invest too much, you won’t have any extra margin to spend on saving for college, paying off the mortgage, or spending money on vacations and car repairs and upgrades,” Kamel explained. “And if you don’t invest enough, well, you won’t have enough in retirement to actually live on and retire with dignity.”

Also use full Ramsey Retirement Calculator To prove that investing $1000 a month with a 10% return can help you become a millionaire even if you… It starts in your early 40s.

While some people think that this is a situation or situation, Kamel explained that you should work on this optional step in conjunction with step four. This way, you can help your children without sacrificing your financial security in retirement.

Kamel didn’t mention a specific amount for your children’s college fund, so you’ll have to decide what works for you. However, it is recommended to use Plan 529 Due to the account’s federal tax-deferred growth, high contribution limits and the ability to convert more than $35,000 of unused funds to your child’s Roth IRA.

Especially if you have a low mortgage rate or want to prioritize investing, you may be skeptical of Ramsay’s advice to pay off your mortgage early. It’s worth it, Kamel said, as you’ll be able to use your mortgage payment money for other things and you’ll have less financial risk overall.

He also highlighted the financial freedom that comes with complete debt relief. For example, it may allow you to work less or pursue opportunities you couldn’t afford before. You may find this flexibility more valuable than any lower mortgage rate you have secured.

When you stay debt-free and continue investing, you’ll build more wealth that allows you to not only live the life you want to live or seek early retirement, but also impact others.

Kamel added: “Being able to give generously to those you love, donate to causes that matter to you, or spontaneously donate to those in need – that’s what makes 7 Baby Steps worth it.”

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This article originally appeared on GOBankingRates.com: Are Dave Ramsey’s 7 steps to building wealth outdated? George Kamel says no